The U.S. division of video game maker Atari filed for bankruptcy protection Monday, moving to separate from its French parent company amid a challenging financial situation.

Founded in 1972, Atari was one of the first video game innovators, and is known for such popular early games as Pong and Centipede. But the company has changed owners several times.

The company said it filed a Chapter 11 proceeding in U.S. Bankruptcy Court in Manhattan amid "adverse trading conditions and limited development funds." Atari cited the scheduled March 31 expiration of its credit agreement with main investor and sole lender BlueBay, and said no lending successor has been found.

The company's European operations have filed similar bankruptcy procedures in French courts, Atari said.

Atari's U.S. group expects to complete a sale or restructuring of all or most assets within 90 to 120 days, the announcement said. Atari said the division has approval to obtain $5 million in debtor-in-possession financing from Tenor Capital, a firm that specializes in distressed lending.

The group will "conduct business as usual" during the Chapter 11 proceeding, Atari said. Robert Mattes will remain as CFO of the U.S. entities, the firm said.

"In light of the current situation with BlueBay, we have decided to take what we think is the best decision to protect the company and its shareholders," Atari CEO Jim Wilson said in announcing the filings.

Atari's U.S. operations have increasingly shifted to focus on developing digital games and licensing. That division has outperformed the rest of the company. However, Atari's board in a Dec. 27 statement noted a "difficult market environment in online and mobile games, which it said was "affecting all players."

In updated financial guidance issued with that statement, Atari warned that the firm "expects to record a significant loss" for the 2012/2013 fiscal year.

The New York bankruptcy filing listed estimated assets of $1 million to $10 million, in contrast with estimated debts listed at $10 million to $50 million.

A list of the firm's 30 largest unsecured creditors included accounting firms Deloitte & Touche and Ernst & Young, and retailers Walmart and Kmart. None of the creditors listed were owed more than $250,000, according to the filing.